In a recent interview with The FinTech Times, industry thought leader Brock Pierce shared his insight on the future of the blockchain space. 2019 will be a year of significant success for the security token industry, which he says will ultimately transform a quadrillion dollar market.
How Brock Pierce Led Blockchain Capital to the Security Token Industry
Brock Pierce has been ahead of the game in numerous blockchain-related ventures.
He first become involved with Bitcoin back in 2009, shortly after the groundbreaking network went live. In October 2013 though, he went all into the blockchain space by co-founding Blockchain Capital.
As Brock said,
“Blockchain Capital was the first dedicated venture fund to invest in crypto and blockchain. I was the main founder and put it together with 15 to 20 friends who co-invested, including Bobby Lee of BTCC China, Charlie Lee of Litecoin, and Matthew Roszak of Tally Capital. There were no fees on the first fund. We weren’t doing it as a business at first, we were just doing it for fun. Then Bart and Brad got very engaged and formalized it.”
It was through Blockchain Capital that Brock forecasted the next wave of digital assets: security tokens.
As detailed by Brock himself, Blockchain Capital launched the first security token during the second quarter of 2017:
“We did the first security token for Blockchain Capital’s third fund, BCAP. The team was Bart, Brad, Jeremy (Gardner, co-founder of Augur), and myself. I was pushing for it. I ran one of the top ten syndicates on AngelList and saw where crowdfunding, equity funding, and venture capital were going to converge. I was also an advisor to DSTLD Jeans, the second Reg A offering in the U.S. related to the Jobs Act, and I knew it could be done compliantly.”
Brock saw the potential in security tokens to overcome much of the regulatory dangers seen in ICOs:
“We were two years ahead of everyone. When you’re a pioneer in a heavily regulated market, this is not an industry where I advise anyone to be a cowboy. Dot your i’s, cross your t’s, cover your bases. This is not traditional entrepreneurship where you just go out there and ask for permission later. Repercussions for messing up in this area can cost you your life.”
The truth behind Brock’s words rang true throughout 2018. The US securities regulatory authority— the Securities and Exchange Commission (SEC)— became increasingly involved in the blockchain space.
The SEC penalized both ICOs and exchanges, and even made fines and arrests as a result of non-compliant custody solutions and general investor fraud.
Security tokens have become attractive to many as a result of their compliance. Since security tokens explicitly declare themselves securities, they are subject to the existing securities laws, at least in the United States.
The clear regulatory guidelines have led some companies to cancel ICOs, and turn to the STO as a compliant alternative.
How 2019 Looks for the Continued Development of Security Tokens
2018 experienced a major transition from ICO to STO. Real world assets such as equity, investment funds, REITs, real estate, and fine art all experienced the benefits of tokenization.
Still however, many have predicted 2019 to be the year of ultimate success for security tokens.
Brock Pierce is apparently of that group. When asked about his outlook for the year of 2019, Brock said,
“Security tokens are going to be revolutionary, they’re going to give birth to a quadrillion market. That’s because we’re seeing the tokenization of the world’s fiat money, debt market, equities, real estate, art…”
Even with the current bear market, Brock maintains a highly optimistic vision for 2019:
“We’re going to see big things being built, multiple applications hitting a million users. I love the fact that prices are down. When prices are up, very little gets built because teams don’t stick around. Everyone is getting rich too quick and that de-motivates people. All the best things I’ve seen built in this ecosystem have been built in bear markets.”
What do you think of Brock Pierce’s comments on the security token industry? Do you agree that 2019 will experience such success? Let us know what you think in the comments below.
Image courtesy of The Crypto Tea.